Earlier this year, the U.S. Department of Labor filed a lawsuit against a healthcare management company for alleged violations of the Fair Labor Standards Act. The lawsuit claimed that the company improperly deducted 30 minutes of pay from its employees for meal breaks, despite being aware—or at least having reason to be aware—that many employees routinely worked through their breaks.
A quick FLSA refresher: In order for “bona fide” meal periods (generally 30 minutes or longer) to not count as worktime, the employee must be completely relieved from duty. An employee is not considered relieved if they are required to perform any duties, active or inactive, while eating.
The U.S. District Court for the Eastern District of Missouri initially ruled in favor of the company. However, on appeal in Micone v. Levering Regional Healthcare Center, LLC, the Eighth Circuit Court of Appeals reversed the district court’s holding and remanded the case back to the district court.
What happened and why is it important?
The company operated a residential care facility that employed healthcare workers to care for in-patient residents. Every day, the facility automatically deducted 30 minutes from the employees’ timesheets for a lunch break. However, there was an unwritten rule – referred to as the “Time Sheet Policy” – for employees who worked through their breaks. These employees were required to submit a temporary time sheet, which needed to be signed by a supervisor to verify that they had indeed worked during their designated break time.
During a DOL investigation of the facility, many employees reported that they either never took their lunch breaks, or that their breaks were frequently interrupted. In some cases, employees found it impossible to take a break due to a lack of available personnel to cover their duties with the residents. Notably, more than 25% of the employees interviewed were unaware of the unwritten Time Sheet Policy, and, when asked to provide the temporary time sheets submitted by employees during the two-year audit period, the facility could not produce any. As a result, the DOL concluded that many employees were working through their breaks without being compensated for the same.
The Eighth Circuit Court of Appeals considered whether the facility’s employees 1) spent their lunch breaks predominantly for the benefit of their employer and 2) whether the employer knew or should have known that the employees were performing work during that time. Importantly, the court emphasized it did not matter if the facility had policies prohibiting employees from working during their breaks or if the employees sought, or failed to seek, compensation for working during their break. Simply put, if employees were working and the employer was aware or should have been aware of the work, the employees must be compensated.
The court concluded that the facility should have known, through reasonable diligence, that its employees were working during their lunch breaks without compensation. This conclusion was supported by the fact that the facility had no temporary time sheets from the two-year audit period, yet had hundreds of such sheets in the months following the audit. This suggests that the policy was likely not clearly defined during the audit period. The court determined that merely having a policy is not enough; employers are required to effectively and clearly communicate this policy to their employees.
So, what is the takeaway for employers?
Employers who automatically deduct pay for meal breaks should stay diligent. A common way for employers to demonstrate reasonable diligence in determining whether employees engage in overtime or work during unpaid time is by establishing a clear and reasonable policy for reporting their work. If employees are unaware of how or when to utilize the reporting system, the employer has not exercised reasonable diligence. Employees should understand, and be regularly reminded of, the clear and straightforward process for requesting compensation. Finally, employers should train their supervisors about the importance of relieving employees of all job duties during their meal breaks.
Micone v. Levering Regional HCC, L.LC., No. 23-3683 (8th Cir. 2025)
